Reputation & RumoursDefending the Corporate Reputation

July 29, 2014

Reputation and RumorsThe way stakeholders perceive the organization based on multiple inputs including actions, product quality and communications

Unverified information spread initially through informal channels about the organization. Can be positive or negative; true or false, or a mix of true and false

How the organization responds to the rumor through words and/or actions. No response counts as a response.

The impact of the response on the rumor and on the organization’s reputation

Reputation

Result

Response

Rumor

Current Reality - Rumors Rumors are a fact of life – people seem to

enjoy gossiping and spreading rumors Rumors may be false, true or partly true –

it is up to the organization to clarify the facts of the matter

Some rumors are the result of a malicious hoax or the attempt to advance a cause

Modern technology makes spreading rumors faster and easier than ever before Facebook is an excellent tool for spreading

rumors

Current Reality - Rumors

Case Study – Cambodian Exodus

Case Study – Cambodian Exodus Approximately 200,000 migrant workers from

Cambodia left Thailand over the course of a week in June 2014

The primary factor leading to this unprecedented movement was a rumor that Thai authorities would soon crack down on illegal workers

At the time of their departure there had been no major crackdown and no formal announcement of one

Why was this rumor so powerful:- Cambodian workers were unregistered

- The NCPO had stated policy toward controlling illegal workers

- The Thai government is controlled by the military

Case Study – Cambodian Exodus The effects of this rumor included short-term

damage to the Thai economy Damage to Thailand’s reputation – especially

considering its recent ILO vote and TIPs downgrade

Damage to Thailand’s relations with Cambodia

Defending Your Reputation

Reputational risk areas

Monitoring for new rumors

Response to damaging

rumorsThe first stage in reputational defense is to determine where you are at risk

The second stage is to stay alert to new rumors

The third stage is to quickly and decisively respond to damaging rumors

Risk Assessment – Know the Environment To help prepare to respond to rumors it is

necessary to first identify areas of risk Internal – operations, products, services,

employees External – NGOs, regulators, community groups

Once risks have been identified they should be prioritized according to likelihood and impact Likelihood – the odds that they will happen in the

near to mid-term futures Impact – the financial, operational, reputational

ramifications of the rumor – how much will it cost

Risk Assessment – Know the Environment

Monitor the situation and key players

Prepare reactive materials and

conduct training

Monitor & seek to proactively

engage relevant stakeholders

Actively engage stakeholders and

address root causes

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H

HIMPACT

LIK

ELIH

OO

D

Risk Assessment – Know the Environment Analyzing stakeholders

Internal / External Friend / Foe Power Influence Access to resources

Your current position – reputational audit Based on insights re. key issues and key

stakeholders obtain benchmark information on the state of your reputation and the reputation of your competitors

Media Relations

Media Relations Media relations is not hard but it is a time-

consuming and long-term process Building good relations with media requires a

commitment to transparency Need to be willing to work with media in both

good and bad times Balance between key media and ROM Understand growing importance of online/new

media

Media Relations During a rumor driven reputational crisis:

A response of some kind is required Speed is essential Know the facts (be able to separate facts from

fiction) Be consistent in your message Communicate broadly – across platforms Have a crisis communications command

structure in place

Media Relations

Rumor

Proactive

Proactive

Reactive

False True

Kill it with facts

Explain Context

Don’t Know

Seek Resolution

Determine T/F

Go Proactiv

e

Go Proactiv

e

Media Monitoring

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Media Monitoring Media monitoring can provide early warning as

well as current status of a reputational issue/crisis

Types of Media Monitoring General – everyday process focused on your news

and your competitors (daily) Issue specific – regular review of media to track issue

development and key players (weekly/monthly) Social media – can be related to first two but often

requires special skills and tools (daily) Crisis monitoring – intensive issue-specific monitoring

executed as close as possible to real-time

Media Monitoring The key to effective monitoring is determining

the important search areas and channels Narrowing the subject matter and the range of

channels makes the monitoring process more efficient

A primary point of failure for many organizations is effectively using the output of media monitoring – especially regarding issues There needs to be an individual or team

responsible for analyzing issues coverage and alerting management to important trends or developments

Operations: It’s what you do

Operations: It’s what you do At an operational level an organization can do

several things to mitigate the impact of a rumor: Maintain clear and open communications Leverage a history of transparency and good

governance Ensure fast decision making followed by appropriate

actions Use employees as ambassadors to reach out to key

stakeholders Make sure that regular operations do not suffer

Have patience Most Internet-based rumors do not last long and if your

response is appropriate and honest the impact is likely to be limited

Case Study – KFC In early June 2014 a rumor started to spread that

a KFC in Mississippi, USA asked a 3-year old girl who was recovering from a pit bull attack and her grandmother to leave because ‘her injuries were disturbing the other customers’

The story was picked-up by local TV news and from their it went national

Case Study – KFC KFC’s initial response was to say that this action

was against its policy and that it was investigating the situation

The company launched two investigations (one internal the other with an independent agency)

KFC also offered to contribute to the girl’s medical expenses

In the face of significant social and traditional media scrutiny KFC never admitted to wrongdoing in this case

Case Study – KFC The result of the investigations were that the

claims against KFC were a hoax and there was no evidence the girl and her grandmother had been to the KFC in question

The company simply announced the results of its investigation without taking action against its accusers

The family initially maintained that it did not lie and the incident happened, but offered no further evidence

Shortly after KFC’s statement the little girl’s Facebook page and donation website were deactivated

Case Study – KFC Why would this rumor spread? Why would the hoax be perpetrated in the

first place? Was KFC’s response appropriate?

Wrap-up Rumors have always been a part of the

business environment and a reputational threat - this will not change

Today technology makes it possible for rumors to spread very quickly and very far

Media still plays a role in helping to make a rumor ‘viral’

Understanding your risks and monitoring the environment are keys to defending yourself

Your response to a rumor should be based on facts and proportionate to the potential damage

ขอบคุ�ณ มาก คุรั�บThank You!

jeremy.plotnick@gmail.com